While steel and aluminum jobs would be created thanks to Trump's tariffs, it would also mean over 495,000 jobs lost elsewhere in the economy.

White House National Trade Council Director Peter Navarro recently cited a new aluminum mill being built in Kentucky as evidence that the Trump administration’s “tough trade actions” are revitalizing American manufacturing. While he calls this “a poster child for the success” of the president’s policies, the reality is that higher costs from tariffs on steel and aluminum imports will hurt American jobs much more than they help.

In March, my firm examined the potential impacts of steel and aluminum tariffs, finding that while over 26,000 steel and aluminum jobs would be created, higher costs from tariffs and retaliation from America’s trading partners would also mean over 495,000 jobs lost elsewhere in the economy. For every American job gained, more than 18 jobs would be lost. These estimates assumed that Canada and Mexico would escape the tariffs; as they did not, we should expect the job loss to grow.

All states would lose more than they win. Michigan: over 14,000 net jobs lost. Ohio: over 15,700 net jobs lost. Pennsylvania: over 16,500 net jobs lost. Wisconsin: over 8,900 net jobs lost.

In Kentucky, the home of the aluminum mill Navarro refers to, while nearly 600 jobs would be created in that state’s steel and aluminum industries, over 7,200 jobs would be lost elsewhere in the state.

Stories of manufacturers of all sizes being harmed by the administration’s steel trade policies are multiplying. In Ohio, a construction equipment manufacturer did away with a plan to hire at least 30 workers after the cost of steel increased by one-third. In Pennsylvania, a cylinder manufacturer CEO said the tariffs would add 10% to the cost of its products. Compensating cost cuts will impact workers soon enough.

These tariffs are a poster child, all right, for job-killing economic policy, far from making America great.

Trade wars have no winners

Letter to the editor:

Peter Navarro’s column is a good example of cherry-picking events and mischaracterizing good economic news to defend the Trump administration’s recent actions on steel and aluminum tariffs. Using the tariffs on washing machines as an example and taking credit for the investment decisions of LG and Samsung, which were announced in February and June of 2017 — long before tariff announcements — is also interesting.

Going back to steel and aluminum tariffs, it is great that there will be 200 jobs created in Ohio. But what about jobs that will be lost in production chains that are using steel and aluminum as an input? Last time the U.S. imposed steel tariffs in 2002, nearly 200,000 Americans lost their jobs to higher steel prices the same year. More American workers lost their jobs than the total number employed by the U.S. steel industry itself, which was 187,500 in 2002.

Then there is the issue of trade lowering consumer prices. A large share of this price benefit accrues to lower income consumers, since they spend a larger share of their disposable income on heavily traded food and clothing items.

The Administration has policies that could help the economy over the long run, such as tax and regulatory reform or simple workforce development, but when it comes to trade policy, ideology trumps good economic arguments. Despite the belief in the White House, trade wars have no winners.

Pinar Cebi Wilber, chief economist for the American Council for Capital Formation; Washington, D.C.

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